(Source: Wall Street Journal

LONDON — U.K. house prices posted an unexpected increase in March, rising 0.9% from February in the first monthly gain since October 2007, the Nationwide Building Society said Thursday.

The U.K.’s largest mortgage lender cautioned that despite the increase it was too soon to say that the bottom of the housing market had been reached.

The data surprised economists who, in a survey conducted by Dow Jones Newswires last week, had forecast a 1.9% fall on a month-to-month basis in March and a fresh record decline of 18.5% on an annualized basis. Nationwide revised the February monthly drop to a 1.9% decline after originally reporting a 1.8% fall from January.

The March house-price index showed that the annual measure of house prices fell 15.7% compared with a year earlier, and followed a 17.6% fall in January.

Analysts were wary about making assumptions about the housing market on one month’s data, especially in a climate of tight lending and big job losses. But investors greeted the figures with enthusiasm and sent the share prices of U.K. home builders higher.

Read Ilona Billington and Anita Likus’s full article “U.K. House Prices Up, But Caution Remains” in the Wall Street Journal (April 2, 2009).

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